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This Week in Crypto: New Year New Prospects Edition

The first week of a new year is usually not enough time to figure out who is going to be the frontrunner in any given space, but if you’re lucky enough to be given an overview of what’s happened and what’s coming up, it certainly helps.

Let’s get the miners out of the way first.

Marathon Digital Holdings: miner to beat

Clearly Marathon Digital Holdings (MARA.Q) is the biggest winner out of all the Bitcoin miners in 2021.

Check out these numbers:

Corporate Highlights as of January 1, 2022

  • Produced approximately 3,197 self-mined bitcoin in fiscal year 2021, an 846% increase year-over-year
  • Produced 1,098 self-mined bitcoin during Q4 2021, including a record 484.5 self-mined bitcoin during December 2021
  • Increased total bitcoin holdings to approximately 8,133 BTC with a fair market value of approximately $375.8 million

That’s definitely a function of a fair amount of spending to scale, and honestly given how much they’ve spent, and some of the deals they’ve made, it would be surprising if they hadn’t made that much money.

During fiscal 2021, Marathon deployed 30,391 miners and put the finishing coat of paint on a new facility at Hardin, Montana. The cumulative hashrate got a jump of 1,790% from 0.2 EH/s in January to 3.5 EH/s in December.

That is a crazy amount.

“2021 was a transformative year for Marathon as we increased our hash rate 1,790% and increased our bitcoin production 846% year-over-year to 3,197 self-mined BTC,” said Fred Thiel, Marathon’s CEO. “We finished the year with our most productive month to date, producing 484.5 bitcoin in December and 1,098 bitcoin in the fourth quarter. We expanded our agreement with Compute North and secured access to reliable hosting and renewable power behind the meter at industry low rates for over 100,000 of our previously purchased miners. And more recently, we placed a record order for BITMAIN’S newest machines, the S19 XP. As a result, we have increased our projected hash rate by 75% from our prior projection of 13.3 EH/s by the middle of 2022 to 23.3 EH/s by early 2023.

Cryptostar hash rate woes continue

Meanwhile, on the other end of the scale, Cryptostar (CSTR.V) has run into a bit of a snag with one of their clients.

Avila Energy has informed the company that they’ve shut down their natural gas power generation site in Alberta. Meanwhile, Cryptostar is trying ot find out why, and meanwhile their court room drama against Avila for noncompliance with terms of their power supply agreement continues.

The squeeze has caused a reduction in CSTR’s mining hashrate of 53,514 megahashes/second from GPU miners and 50.3 petahashes/second from ASIC miners. The company intends on having the numbers back up as soon as possible.

Riot Blockchain: quietly building up steam

Riot Blockchain (RIOT.Q) was decently quiet throughout most of 2021 compared to some of its competitors. They bought some miners—capping off their expenditure in December with a purchase order with Bitmain totalling $301 million for 27,000 more S19XP which they will be deploying continuously between July 2022 through December 2022. This purchase should bring their fleet to over 120,150 Antminers spitting out Bitcoin for 370 MW of energy by Q4 2022.

“Riot is purpose-built to excel in Bitcoin mining. As a result of the Company’s vertically-integrated strategy, Riot enters 2022 with a uniquely de-risked expansion plan, as the major components to succeed at an industrial-scale have been internalized. In addition to reducing execution risk, Riot’s vertically-integrated strategy highlights the significant operational and financial benefits of its investments in engineering and technology, which is further demonstrated by the deployment of immersion-cooling technology at a significant industrial scale. In 2022, Riot plans to continue focusing on operational execution, which management believes will continue to highlight the Company’s vertically-integrated business strategy and its position as a low-cost producer of Bitcoin,”said Jason Les, CEO of Riot Blockchain.

Riot estimates that the purchase orders will jack their hash rate capacity by 3.8 EH/s to 12.8 EH/s,which would be a 42% increase over the company’s previously announced estimate of 9.0 EH/s. This particular proposed increase doesn’t include any of the incremental hashrate bounces they’re eexpecting from their buildout of 200 MW infrastructure in Whinstone, Texas.

Production Updates

  • In December 2021, Riot produced 425 BTC, an increase of approximately 334%, as compared to the December 2020 production of 98 BTC.
  • In Q4 2021, Riot produced 1,355 BTC, increasing approximately 349%, as compared to Q4 2020 production of 302 BTC.
  • In 2021, Riot produced 3,812 BTC, increasing approximately 269%, as compared to 2020 production of 1,033.
  • As of December 31, 2021, Riot held approximately 4,889 BTC, all produced by the Company’s self-mining operations.
  • Riot currently has a deployed fleet of approximately 29,593 miners, with a hash rate capacity of 3.1 exahash per second (“EH/s”).

Hut 8 Mining continues win streak with 276 bitcoins in December

In December alone, Hut 8 Mining (HUT.T) mined 276 Bitcoin, with an average production rate of 8.9 Bitcoin per day. It was all deposited into custody, which brought their total in reserve to 5,518 as of new years eve, which was an increase of 97% from the time the ball dropped the previous year.

Operations Updates for December 2021:

  • Purchased 2,505 MicroBT M30S machines from Foundry Digital that were already installed at the Company’s site in Medicine Hat, Alberta. This fleet of miners added incremental hashrate of 228 PH/s during the month of December;
  • Installed 2,782 more efficient MicroBT M30S and M31S+ machines at the Company’s site in Drumheller, Alberta;
  • Electrical upgrades are ongoing at the Medicine Hat site, which are necessary to allow for optimal hashrate efficiency from ongoing delivery of new MicroBT miners. These upgrades are on track to contribute an additional 450 PH/s in February 2022

Operating capacity is presently 2.0 EH/s, which represents a 125% increase in hashrate from December 31, last year.

“This has been a tremendous year for our industry and I congratulate not only the Hut 8 team, but every single one of our peers who have worked hard to build meaningful operations in North America. 2021 has been a year of transformation for Hut 8, with a focus on not only rebuilding and upgrading, but future-proofing our operations. We are business-building technologists, with a focus on diversification, while keeping Bitcoin mining at our core. I have been driving innovation and transformation in the technology industry for over 20 years and have never been more excited or energized when looking forward to the year ahead,” said Jaime Leverton, CEO of Hut 8 Mining.

Transformative year. Check.

They’re working on a third mining site in North Bay, Ontario. They’ve got the ventilation and custom racking systems complete while they build the data centre structure. The company hopes to have it up by mid-Q1 2022 and operation at 35 MW by the end of Q1, giving another 850 PH/s of additional hashrate. After that, their total hashrate will be 3.35 EH/s by the end of Q1, 2022. Not exactly in the same ballpark as MARA or RIOT, but it should be enough to continue their win streak .

Just have to see how the pandemic weighs in.

Canaan adds another vertical

Canaan (CAN.Q) is really Bitmain’s only real competition, and definitely their only publicly-traded nemesis. They build the ASIC rigs required to mine Bitcoin, and now they’ve expanded their operations by deploying over 10,000 mining machines throughout 2021. That’s a respectable amount of growth.

Their next step isn’t just deploying the machinery for miners, but actually getting into collaboration agreements with miners to co-mine Bitcoin in Kazakhstan. Bitmain isn’t doing that and it could produce an interesting edge.

In the dying weeks of 2021 the company launched their last batch of mining machines under its first phase of deployment in Kazakhstan. By the time we were ringing in the new year, they had expanded to an aggregate of 10,300 AvalonMiner units in mining operations in the country. Now they’re looking to add additional computing power according to its mining business expansion plan.

“The deployment of over 10,000 mining machines not only deepens our collaboration with leading local mining farms, but also marks our great strikes in our cultivation of the Bitcoin mining business. As we expand our involvement further down the Bitcoin value chain, we are enhancing the depth and width of our global presence while solidifying our business operations. Joining hands with mining firms, we are excited to leverage each of our respective strengths and resources to maximize profits and capitalize on the growth of the digital assets industry,” said Nangeng Zhang, chairman and CEO.

Are you ready for Ready Player One, the real life version?

We’re certain that we’re going to see the encroachment of that creepy technological space called the metaverse. It’s young yet, but over the next twelve months the probability of seeing this place develop is close to 100%. Granted, there’s money to be made there in Real Estate (which is bizarre) and gaming. Now, though, we have AeroCompany (ACY.NYSE), and their subsidiary Mega Metaverse getting in on the action by offering registration in the firs week of January for the test-play period of 7 days for its first game, called “Mano.” More games will be launched soon.

AiSpace uses the concept GameFi, which is a portmanteau of game and finance, and is actually a mix of NFTs and DeFi, with a play-to-earn model that means the players can presumably prizes and money while they play.

“Leveraging the explosive growth of GameFi, we anticipate our first game Mano will hit the GameFi world by storm, offering gamers an entertaining gaming experience and source to earn. We also anticipate our new GameFi business will bring good revenue stream for the Company and promising returns for our shareholders,” according to Yucheng Hu, CEO of the company.

INX is the New Crypto Pubco on the NEO exchange

INX Limited (INX.NEO) and Valdy Investments have gotten the nod from the Neo Exchange to list their common shares after the reverse takeover of Valdy by INX. Naturally, INX will become a subsidiary of Valdy, and will henceforth change its name to”The INX Digital Company.” The transaction should be completed on or around January 10th, so they’re not live yet.  Soon.

Here’s what the new amalgamated company will do:

They own regulated trading platforms for cryptos and digital securities, bringing traditional markets to fintech. The overarcing goal is for INX to be the preferred global regulated hub for digital assets on the blockchain.

We’re going to start seeing more companies like this make an appearance in the foreseeable future.

“We are proud that the Neo Exchange has conditionally approved our listing on the Neo Exchange,” said Shy Datika, CEO and founder of INX. “We have built a number of businesses to address the growing global importance of digital assets. A public listing on the Neo Exchange will introduce us to a wider audience. We are very excited to participate in and help lead the digital revolution.”

WonderFi acquisition of Bitbuy brings DeFi closer to adoption

This is the first time Wonderfi Technologies (WNDR.NEO) has shown up in a weekly roundup so a little education could be required. They’re a tech company that wants to provide better access to DeFi through education. Their strategy involves a consumer finance application, a digital asset portfolio, with both crypto and DeFi assets, as well as an executive team that’s come from the who’s who of companies in the crypto-space. Some of which include Galaxy Digital (GLXY.T), Hut 8 Mining (HUT.T), and Bigg Digital Assets (BIG.C).

Their latest news involves the acquisition of First Ledger, which is the parent company of Bitbuy, Canada’s first approval crypto marketplace, with over $4.4 billion transacted.

“This transaction represents an exciting new chapter for Bitbuy,” said Dean Skurka, president and chief financial officer of Bitbuy. “The alignment with Wonderfi’s talented team, along with numerous operational synergies, represents opportunities for future growth we can collectively share with our clients, staff and shareholders.”

Bitbuy has been around since 2016 and has done business with over 350,000 users and brought in revenue in excess of $32 million by September 30, 2021, after which it became the first regulated crypto marketplace in Canada in November. The Deloitte Technolgoy Fast 50 program ranked their platform in ninth.

Here’s what Bitbuy brings to the table:

  • In-houses one of Canada’s fastest-growing crypto platforms with leading market share in bitcoin/Canadian dollar and ethereum/Canadian dollar and a demonstrated history of material revenue growth;
  • Introduces multiple new business lines to Wonderfi, including an approved crypto marketplace and OTC (over the counter) business, which services both retail and institutional clients;
  • Introduces a strong front-end business line to Wonderfi, enabling licensed fiat on-ramp and platform to a growing Canadian market segment;
  • Adds over 375,000 registered users to the Wonderfi ecosystem and over $455-million of assets under custody as at Dec. 31, 2021;
  • Presents the ability to bring new features, offerings and functionality to an existing user base on the Bitbuy platform;
  • Establishes Wonderfi as the owner and operator of the first crypto marketplace licence in Canada;
  • Accelerates product development capabilities and scaling potential by adding over 80 staff including engineers and other personnel;
  • Material revenue and cost synergies expected via user base integration, cross-selling services and a combined global offering.

And that’s basically it for the first week of 2021. If there’s a company you’d like to see showcased here (or maybe in our daily ideas sector) that you think should get some love—feel free to drop it into the comments, or better yet, in our discord server.

—Joseph Morton

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goldjunky

Thank you for the update…wondering if Graph is going anywhere as
I believe they are in the popular defi space?